PH net external liability position widens in Q2 2023

The Philippines’ net external liability position expanded in the second quarter of 2023 from the prior quarter due to nonfinancial corporations and the government, preliminary data from the central bank showed.

The country’s net financial liability position widened by 4.8% quarter on quarter to PHP 2.4 trillion at end-June 2023 from PHP 2.3 trillion, the Bangko Sentral ng Pilipinas (BSP) said on Friday.

The BSP said this was “due to the higher net external liability positions of the nonfinancial corporations and the general government.”

“However, this was partly offset by the lower net external liability position of the other financial corporations,” it said.

Year on year, the country’s net external liability position widened by 79.5% from PHP 1.3 trillion.

The nonfinancial corporations sector was the largest net debtor, with its net financial liability position widening by 3.8% to P8.8 trillion from PHP 8.5 trillion in the previous quarter.

“This resulted from the increase in the other financial corporations’ holdings of equity and investment fund shares and debt securities issued by the nonfinancial corporations. Further, loans from nonresidents and other depository corporations increased,” the central bank said.

Year on year, nonfinancial corporations’ net financial liability position widened by 10.2% from P8 trillion.

The general government’s net external liability position expanded by 2.7% quarter on quarter to PHP 8.7 trillion from PHP 8.5 trillion amid lower deposits with other depository corporations and higher holdings of government securities of the other depository corporations and other financial corporations.

Year on year, the sector’s net financial liability position widened by 19.7% from PHP 7.3 trillion.

Meanwhile, households’ net financial asset position rose by 1.2% to PHP 12.4 trillion in the second quarter of 2023 from PHP 12.2 trillion in the prior three-month period amid increased holdings of equity and investment fund shares issued by other financial corporations.

“Consistent with the quarterly development, the households’ net creditor position increased year on year due primarily to the increase in the sector’s holdings of other financial corporations-issued equity and investment fund shares,” the BSP said.

“Likewise, the sector’s net creditor position to the other depository corporations grew as the households’ deposits increased. Despite the increase in its financial liabilities, the households’ stock of financial assets was three times more than the amount of its financial obligations,” it added.

The net financial asset position of other depository corporations likewise widened by 7.3% to P1.9 trillion at end-June 2023 from P1.7 trillion as of March amid lower government deposits, as well as and higher holdings of government securities and bank loans to nonfinancial enterprises.

However, year on year, the net creditor position of other depository corporations declined by 9.2% from PHP 2 trillion.

Lastly, the central bank’s net financial asset position increased by 5.9% to PHP 836.5 billion at end-June 2023 from PHP 789.7 billion in the previous quarter amid lower deposits from other depository corporations.

The central bank’s net creditor position rose by 5.4% year on year from PHP 793.4 billion. — AMCS